Saudi fines ex-fund portfolio manager

Riyadh, July 20, 2009

The Saudi bourse watchdog fined a former fund manager at a local bank for breaching trading regulations in the latest case of violations to be officially acknowledged in the opaque market.

The Capital Market Authority (CMA) fined Abdulaziz Almediheem SR100,000 ($26,670) and banned him from share trading for three years, it said in a statement posted on its own website, said the stock exchange and the official news agency.

The decision was made after the Appeal Panel affirmed a ruling that Almediheem violated some regulations for persons authorized to deal in shares and others linked to the market's code of ethics.

Almediheem said he accepted the charges and agreed to pay the fine. "I don't have a choice, I have to accept it," he told Reuters by telephone, adding that he was not aware that he was violating the regulations and did not intend to violate them. "If I did I would not have used my father's name," he said."

CMA said he had violated a regulation that prohibits placing a broker's own orders before those of his clients. He used his father's account, the statement said. It also said Almediheem violated the market's code of ethics.

Almediheem's father was also ordered to pay back 14.9 million riyals from "irregular actions" his son carried out with his account, the CMA said.

Almediheem worked as private portfolio manager at Riyad Bank, CMA said. A spokesman for the bank, which is one of Saudi Arabia's four largest by market value said: "The bank terminated his services eight months ago."

Like others in the Gulf region, Saudi Arabia's stock exchange has been dogged by allegations of insider trading and manipulation of stock prices, and CMA has slapped hefty fines on many investors and executives found guilty of manipulation.

Analysts say CMA needs to make adherence to corporate governance regulations compulsory for listed firms instead of voluntary in order to achieve greater progress in boosting transparency in the Arab world's largest stock market.

In remarks published by Okaz newspaper on March 28, CMA's head Abdul-Rahman al-Tuwaijri said his department was probing 92 cases of suspected violations including price manipulation and improper disclosure.

The cases are among 151 cases registered last year which involve suspected price manipulation, misleading and irregular disclosures and insider trading, he said.

The Appeal Panel is formed by the Council of Ministers and hears appeals against decisions issued by the Committee for the Resolution of Securities Disputes (CRSD), a sort of first instance court that looks into cases in the stock market.-Reuters